Trends: Skunk Works

By Mel Duvall  |  Posted 01-17-2003 Print Email
Can ROI be proven before a project gets the green light? Some firms are building new IT test labs to find out—and with profitable results.

In the fall of 2001, pressed by dwindling revenues, cutthroat rivalry and a full-blown technology recession, Montreal-based Bell Canada needed to cut costs—and fast. CIO Eugene Roman knew the telecom could save millions of dollars in customer service costs each year if it could tie together four different service-troubleshooting networks and give customers access to them. The idea: reduce Bell's payroll costs by letting customers, not high-priced service reps, check whether service complaints were being resolved—and how quickly.

Trouble was, vendors were telling Roman such a system would cost Bell as much as $10 million to buy the needed software and equipment. At first, Roman was discouraged: Even in good times, such a price tag would be a hard sell, but in the spending backlash, he knew approval would be even tougher to get.

Then Roman had an idea. Why not see if Bell could do the project more cheaply in-house? Roman would develop a pilot to prove the business payoff—before asking Bell's executive board to commit to full funding. Sure, a pilot could fail. But what if it could instead produce cold, hard numbers about benefits to the bottom line? Roman would not only boost his own credibility as CIO before the board, he'd also get the backing he'd need to roll out the project companywide.

Roman's strategy worked. As a pilot, there was less risk of cost overruns. But Roman did better than keep costs down. The pilot delivered a workable, homegrown prototype, and did it in roughly 60 days—nearly a third of the time that many full-blown projects take. Further, the final cost amounted to about $1.9 million, a fraction of the $10 million Bell would have had to pay an outside vendor.

But better still, the pilot helped to establish a new and more permanent proving ground at Bell for all kinds of information technology projects. Called exCITE!, the new IT development lab has since tried, tested and proven the business merit of dozens of new IT initiatives that, all tolled, have resulted in more than $15 million in savings and some $10 million in new revenues for the company. "When you can tell a senior executive that, in no later than three months, he will get a solution—and know exactly what the payback will be, it's very different from saying, 'I'm going to deliver a project in 18 months,' and 'trust me,'" says Roman. Agrees Guy Marier, president of Bell Quebec: "The lab is a way to develop ideas and get results faster."



 

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